Politics
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The media seem to talking about this every day at the moment but none of them specify which part of it might be dropped. Inflation, average wage rises or the 2.5%? If it is the 2.5% then I am happy with that as I can't see inflation falling below 2.5% for the next 5 years at least. I have been a pensioner for 18 years and it has gone up slightly in real terms compared to RPI but nowhere near enough to keep up with essential costs like Insurance, my biggest single cost for the last 4 years, and Council Tax which is our second highest cost. Both are more than we (my wife and I) spend on food or energy.
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As a general review into social care and pension provision then let's see what the
proposals are. No red lines for me. Pension age probably needs review too, but expecting folk to work beyond 65 is already problematic for some. Seems as if folk retiring in 20-25 years time will have made better private provision than those retiring today. Although the cost of living crisis makes that increasingly difficult to maintain. |
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A Labour MP interviewed at the conference said that private pensions will be much lower in 20 years time as the provision by employers is much less generous than it was. I paid into a private pension of my own and never had one from an employer but most people don't. It is not just pension though. Free this and that adds up although I have never used my bus pass and the cold weather payment although welcome is not life changing. The biggest saving is not having to travel to work but that does not cost the taxpayer.
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I think there were some great pensions, but not so many
for those retiring today, as compared to the gold plated pensions that were available. I think more workers pay more into their own pensions and people are waking up to what they can do with their money. Obviously there are millions falling out of pension saving at bottom end of earnings achievers, so lots of work still to be done. |
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AFAIK,
The triple lock was bought in as a solution to the state pension declining to circa 22% of the average wage. The macroeconomists say that a pension below 33% of average wage has a detrimental affect on the wider economy mainly due to it's effect of downward pressure on GDP. The Triple lock was projected to bring the pension to 33% arround 2032-2035, but due to higher inflation and lower wage growth than expected, it currently sits at 32% of average wage. This gives the politians some macroeconomic breathing space* to ease off the triple lock, but doing so is a policical hot potato. *Breathing space: Or the economy is about to spiral down because wages have slipped back rather than pensions moving up. All of the equations used to calculate the effects and pros and cons, rely on a reliable measure of inflation for pensioners, given the distorting effects of increased geo political activity over recent years on the pensioners inflation basket, the equations used will likely have lost their predictive accuracy. |
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The number of over 65s paying tax has risen by more than 3mn in the five years since the tax threshold was frozen and has broken through the 10mn mark for the first time.
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The figures are misleading as most people don't just get sp. With the personal tax allowance frozen, a lot of the increase in sp comes back to the treasury, via income tax. Not directly through the pension of course, but via other sources of income.
As I copied above, pension credit is hugely lucrative for those who arranged their affairs to qualify for it. |
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Thanks for the detail Cider but I don't qualify for any of that apart from the cold weather payment and bus pass which all pensioners get. If you have significant savings you have to spend most of it to qualify.
Escapee, the 2.5% kicked in for a couple of years when inflation fell to near zero but that is very unusual. The RPI or CPI are universal. There is no specific Inflation index for pensioners who are less affected by car costs but more by heating as they are at home for most of the day. We us a combination of heating oil and electricity for heating and hot water so we will be wearing 4 or 5 layers of clothes when it gets really cold. |
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I didn't expect you to qualify for PC, sage. Predominately I posted it to demonstrate the smoke and mirrors at play. There is a huge incentive to qualify for PC. The worst of any world is to get full sp and/or a very modest private pension. Those who didn't have quite enough credits to qualify for full sp will be far better off, getting lots of other concessions, including ctr.
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It's very similar to regular welfare, almost all of the incentives are tilted in the wrong direction.
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They've done well for themselves, fair pay, but a number of those in receipt of sp are 40% income taxpayers, as that threshold is also frozen, the number will be increasing.
That of course means 40% of any increase in sp for those people is coming straight back to the treasury. |
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Particularly those on platinum plated, index linked, public sector pensions.
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No ice with mine ....
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Hope will sort this
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bob hope
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Until 2030. Pensioners can relax. In the meantime the status quo remains. Come 2030 Labour could be a back number, so does Mr Burnham. The last date for a General Election is 2029.
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So what is the Alternative to the Triple Lock ? Inflation ?
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Nigel Farage, Reform UK leader, using fewer words, states that he would "cut foreign aid, migrant welfare and net zero spending. Andy Burnham will cut your pension," referring to the change to the triple lock.
Mr Burham may have handed the Keys to Reform |
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The choice of average earnings as the one to remove is a surprise as it has to be the least reliable. Are pensioner incomes included in the calculation? You can be sure that those in the black economy are not.
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It includes public sector pay rises. Hence it's been disproportionately high recently.
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You may be sure they have chosen the one element of the triple lock that costs the most money but if they are going to reduce pensions to people who mostly have paid National insurance for 42 years or more, why are they so reluctant to reduce benefits to those who have never paid any NI at all? I spent 2 years working and studying in America from 1966-68 and that reduces my State Pension by 2/42nds of the full amount. Over 18 years that is a lot of money. Great way to encourage enterprise and education overseas.
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It's a very complex area, but I'm assuming you are on the old style pension which included SERPS, contracting out et al. They'd argue if you contracted out then you got the benefit in your pension away from the state pension. People reaching sp age after the 2016 cut off only need 35 years', so can have enough credits by their 50s. For example I only contracted out for a few years but all of my SERPS is ignored/gone, and instead I will get maximum new sp (if I make it that far). I suspect you'll have two elements to your sp, basic and additional if you weren't contracted out for all of your contributory years.
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I do have extra which as I recall was called earnings related back then but I have still lost those 2 years when I paid into the US system but get nothing for it. I retired at 56 but then paid a self employed contribution for 9 years to avoid losing more qualifying years. I do understand that the 35 years was an Osborne idea which penalised some who started work at 18.
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Some of us mugs won't get anything until at least 68, if the country is still solvent !
I recall many, many years ago I advised my Mum to manually pay missing years for when she was raising us. My Dad would have been reluctant, but it was a compelling option so I put my foot down. |
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Triple Lock could be another Winter Payment Allowance. To take that away from the generation that has put so much into the economy and country requires a lot of political guts and convincing. Most will see it as a diversion and distraction for funding the illegal immigrants in hotels, etc.
When will the cost of funding this group of non-productive, non-integrated and non-income enhancing exceed the cost of nhs funding? Anyone? |
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As soon as the Replacement Theory has become fact, no longer dismissable as a 'far right conspiracy'
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